Concurrent receipt could cost $3.9 billion a year, new report says
By Rick Maze
Times staff writer
A new Pentagon report on concurrent receipt raises doubts about ending the pay offset for military retirees.
Prepared under congressional mandate by a contractor, the report says scrapping the policy that requires a dollar-for-dollar offset in military retired pay by the amount received in veterans’ disability compensation could cost the Pentagon as much as $3.9 billion a year, more than twice previous estimates.
Because the repeal likely would prompt more retirees to seek disability payments, the report estimates the government’s cost could rise to $5.9 billion in 2003 and $7.6 billion by 2007.
The release of the report by SAG Corp. of Annandale, Va., comes as Congress speeds toward eliminating the offset for some or all retirees with service-connected disabilities. The stakes are high — a policy statement by the White House Office of Management and Budget warns of a possible veto of the entire 2003 defense authorization bill if lawmakers include provisions to allow concurrent receipt of full retired pay and disability compensation.
The House version of the bill would phase out the offset over five years for retirees with disabilities rated at 60 percent or more. The Senate would repeal the offset immediately for disabled retirees with at least 20 years on active duty.
A House-Senate conference committee will decide how to proceed. Negotiations to settle differences in the bill, and what to do about the veto threat, are expected to begin in mid-July.
As of Sept. 30, a total of 642,618 disabled active-duty retirees had their retired pay reduced by an average of $459 a month, while another 12,964 reserve retirees were giving up an average of $324 a month, according to the Pentagon report.
The size of the offset for individuals depends on the level of disability and the amount of retired pay. It can be as much as $2,576 a month for a 100-percent disabled veteran.
White House officials cite money as the key reason for a possible veto. They also argue, as have past administrations, that the 1890 law barring retirees from concurrently drawing full retired and disability pay is designed to avoid compensating people twice for the same period of service.
The veto threat, coming just as disabled retirees believed they were on the verge of victory, has drawn complaints from military and veterans’ groups.
“Those men and women who are putting their lives on the line in Afghanistan have to believe that this country will take care of them when they return,” said Joseph Fox Sr., president of Paralyzed Veterans of America. “Service members who have served their country honorably should not be penalized for suffering a disability while in service to the nation.”
Using information from the Defense Department actuary and the Department of Veterans Affairs, the report estimates that about 35 percent of the nearly 1.9 million military retirees are affected by concurrent-receipt limits. The estimate of about 655,600 retirees with service-connected disabilities recognized by VA is greater than previous projections of about 450,000, which is the main reason the report predicts a larger price tag than the $2 billion Congress previously discussed.
The report’s primary purpose was to judge whether disabled retirees are treated unfairly. The Pentagon concludes the policy is in line with what the private sector, police departments and federal, state and local governments do for retirees who are disabled on the job.
The report recommends the offset remain in effect, with the military doing a better job of explaining to service members the differences between retired pay and disability compensation. It also suggests a VA review to determine if disability payments fairly compensate for the cut in earning potential that comes from having a service-connected disability.
Don't believe the SAG report. They are dupes for DoD (who hired them).
Also cost will be going down because the WW2 and Korean Vets are dying which is what they are hoping for. You don't have to pay a dead vet every month.
The whole thing stinks to high heaven, it is a corrupt system right there along side of CHAMPUS/TRICARE.
Someone answer me this why is it they want to spend 33Billion a year on the health care of ILLEGAL CRIMINAL MIGRANTS and not fund Concurrent Receipt. Why does BUSH want to placate 12 million ILLEGAL MEXICANS instead of paying the Retirement/Pension (earned) of 450,000 - 650,000 (Americans) Retired Disabled Vets?